And three trends likely to result

Welcome to 2022 and what’s become yet another part of the ‘new normal’ since Covid entered our lives – volatility. 

Normally when the term volatility is used, we financial types are usually talking about financial markets, currencies, etc being volatile – some periods things go up, sometimes they go down and sometimes the representative curves showcase a bit of a wild market ride. It’s what markets do.  

However, volatility doesn’t just seem to be found in financial markets anymore – rather it feels like it’s just part of life in general – much like the Covid graphs we see on the news each day. And for many of us, having that level of volatility in our everyday lives,  businesses and workplaces is not something we’ve really dealt with previously. 

Part of the feeling of volatility is a feeling of being out of control; that things are not going as, well, as they ‘should’. And that’s where a lot of the issues lie.  When we come to rely on the way we expect things should be, those expectations can get in our way of preparing for and dealing with what is and being prepared for whatever shows up.

According to Harvard Business Review (HBR), in 2022 we’re likely to see further increases in levels of volatility in our lives and businesses. New variants are likely to emerge, meaning we’re likely to continue to face staff shortages, more remote working, closures, product/service shortages – in short, more disruption to how we previously worked and ran businesses. 

In many respects, what comes next might feel a bit like survival of the fittest. So the HBR researchers came up with a number of trends that are likely to result from such volatility, that we thought might help prepare you and/or your business to make it out the other side of whatever comes next.

The great resignation and the resulting war on talent is likely to see business owners shorten workweeks or be more flexible rather than increase pay.

As we pointed out in a recent blog post, one of the big things to emerge out of Covid is a much sharper focus on work-life balance by employees. In the US, pay packets are increasing more than 4% (up from historic 2% levels and we’re likely to see that here too). But if you’re struggling with your business’ cashflow in the current environment, one conversation you might be able to have in terms of retaining staff is around reducing hours and keeping compensation at the same level, or looking at ways of being more flexible – same hours squashed into a more compact 4 day week, working from home, flex time – work 8 hours, but around a flex schedule (think split shifts 6-10 am and then 1-5 pm in the office or 10-2 pm in the office and then 6-10 pm at home, etc). It’s a new way of thinking about staffing that working from home has made us all have to think about. The thing to keep in mind is as long as the work gets done and someone’s on hand to cover the hours customers need you to be available to them, it can work.

Wellness will become a critical employee (and business owner) metric.

If there was one thing Covid’s volatility really put on display, it was just how fragile people can become in terms of their mental (and physical and financial) health. Having access to ERP programs, and even just suggesting that people talk their problems through with a government or charity helpline or a colleague can make difference in how supported people feel of around 20-30%. It might seem cliched, but a problem shared, really can be a problem lessened (or better still, sorted). Think about what you might be able to put in place.

Automation will create extra space for both employer/employee/client relationships and innovation.

We’ve already started to see this with the introduction and market adoption of Xero. Once upon a time, book-keeping was excessively time-consuming, finicky and the focus was on managing all the detail (and bits of paper). Whereas now, Xero’s automation allows us and our clients to really focus on what’s going on inside a business. How timely are your customers paying you, what does that say about their relationship to your business, who is getting wobbly as a customer, etc; who are your biggest customers and how much weight do they hold within the business and is this the right balance you’re wanting to achieve, etc. This information is now readily available. It means you can change your business where required based on what’s going on now or at least, very recently rather than waiting until year-end or longer – no more looking back and wishing you’d taken action a whole heap earlier. And the same goes for other types of automation – the more you can automate your business’ less critical tasks, the more time and space you’ll have to really delve into innovation, pivoting your business to better reflect your customer’s needs or spending more time with your staff on the things that are important to them. HBR’s research showed that around 65% of tasks management and managers do now, have the potential to be automated by 2025 – which means you’ve been warned that the world of work is about to shift massively in the coming two to three years. Best start thinking about what changes might be headed your business’ way.

And that’s where we can help. If you’re looking for a trusted business partner for your business that can help you better navigate what’s ahead and find better ways of doing business, we’d be delighted to help. You can call us on 6023 1700.

About us:

Lloyd Accounting is a boutique accounting firm based in North Albury that operates with the sole purpose of making your tax and business affairs as easy as possible. For us, it's about really understanding what it is you're wanting to achieve and then using our experience and expertise to help facilitate that.

Please note - our new location:

Lloyd Accounting is now located at 932 Waugh Rd, North Albury, NSW.

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